Frequently asked questions – Canada (English) – Retail Banking and Wealth Management

What is FATCA?

FATCA stands for the Foreign Account Tax Compliance Act. It is U.S. legislation introduced by the United States Department of Treasury (Treasury) and the Internal Revenue Service (IRS) in 2010 to encourage better tax compliance by preventing U.S. Persons (see glossary) from using banks and other financial institutions to avoid U.S. taxation on their income and assets.

A significant number of countries worldwide have signed Intergovernmental Agreements (IGAs) relating to FATCA compliance with the United States government. Canada entered into an IGA with the U.S. and introduced legislation to make the IGA part of the laws of Canada. (Please refer to glossary for IGA definition). July 1, 2014 was the effective start date for FATCA in Canada under Canadian legislation.

What is the impact of FATCA?

On an annual basis, Canadian banks and other financial institutions are required to report information on financial accounts held by U.S. Persons to the Canada Revenue Agency.

HSBC has made a commitment to be fully FATCA compliant in all countries where we operate. We will therefore be reviewing our existing customer base to confirm the FATCA status of our customers and where necessary we may have to contact our customers for further information and documentation.

Is HSBC the only bank to be affected by FATCA?

No. Generally, all banks and other financial institutions in Canada are required to comply with FATCA. However, their approaches to adopting FATCA may differ. HSBC is committed to be fully FATCA compliant in all countries where we operate.

What does HSBC have to do to comply with FATCA?

To comply with FATCA, HSBC will:

• Conduct a review of new and existing customers to identify those that are reportable under FATCA. Business banking customers will be classified according to the Canadian FATCA legislation (for example, as U.S. Persons, Financial Institutions or Non-Financial Foreign Entities)
• In Canada, report information to the CRA on all accounts held by U.S. Person. In addition, HSBC may also need to report information about customers who do not provide the required documentation to us.

How do I know if I am affected?

FATCA legislation affects both personal and business banking customers who are “U.S. Persons” (see glossary) for U.S. tax purposes. The FATCA legislation also affects certain types of businesses with U.S. owners.

For more information, please visit the relevant IRS: External site: Link opens in an overlay or Canada Revenue Agency (CRA) website : External site: Link opens in an overlay or contact a tax professional.

Is this the only time I will be contacted for this information?

We will try to limit the number of times we request this information from you. However, if you have multiple accounts with different members of the HSBC Group, then you will receive more than one request for FATCA documentation.

In addition, any change in your account information may require you to supply alternative documentation to that currently held.

Am I only affected if I am a citizen of the U.S.?

No. If an individual’s account holds any of the following criteria, HSBC may request further information/documentation to determine if your account is required to be reported to the CRA as a U.S. Reportable Account.

• U.S. citizenship or U.S. residence
• U.S. place of birth
• U.S. address including U.S. PO boxes
• U.S. telephone number
• Repeating payment instructions to pay amounts to a U.S. address or an account maintained in the U.S.
• Current Power of Attorney or signatory authority granted to a person with a U.S. address
• In Care of or Hold mail address which is the sole address for the account holder

If I was born in the U.S., does that mean I must be a U.S. Person?

Generally, a person born in the U.S. is considered a U.S. citizen and would be a U.S. Person for FATCA purposes. This means the U.S. Person’s account would be reported to the CRA as required unless the financial institution was provided with documentation to determine non-U.S. citizenship. Please consult with your tax advisor or the CRA Guidance on the CRA website for more information regarding the FATCA status of persons born in the U.S. and the documentation required to determine non-U.S. status.

What does FATCA mean for me if I am a U.S. person?

If you are considered a U.S. Person (see glossary), you may be asked to supply HSBC with additional information/documentation. You may also wish to visit the relevant IRS or CRA website to determine if you need to complete and submit any additional documents.

If you are a specified U.S. Person, under Canadian legislation relating to FATCA, HSBC is required to report information about you and your account to the CRA on an annual basis.

While we will correspond with affected customers in due course, HSBC cannot offer any advice relating to FATCA and we recommend you contact a professional tax advisor to discuss your personal tax situation.

What does FATCA mean for me if I am not a U.S. Person?

For most customers, FATCA will have minimal impact, and there will be no action required. However, HSBC may still contact you to confirm your status as a non-U.S. person if we have reason to believe you are potentially a U.S. person for FATCA purposes.

Does FATCA replace existing U.S. tax rules that I already follow?

FATCA does not replace the existing U.S. tax rules. It may, however, add additional requirements and complexity to the existing tax rules you may already follow. We recommend you contact a professional tax advisor to discuss your personal tax situation.

What happens if a joint account is held by a U.S. Person and a non-U.S. Person?

Each joint account holder is treated as a separate person for reporting purposes, but the full balance is treated as attributable to each account holder. This means you could have situations where one account holder is reportable and the other is not, depending on the person’s U.S. tax status.

How frequently will I have to provide information for FATCA purposes?

FATCA is an ongoing process. If your account information changes, we may be required to contact you to obtain additional information so that we are able to update your account classification under FATCA.

What information will HSBC report to the CRA?

The information reported to the CRA will depend on the FATCA classification of the customer. This information will typically be of a personal nature (for example, Name, Address, U.S. and Taxpayer Identification Number), and of a financial nature (e.g. Account number, Account balance/Value, Payments/Proceeds).

What types of information and/or documents do I need to supply to HSBC?

We will communicate with the affected customers and provide details of the information/documentation HSBC needs for FATCA purposes. Documents may include the HSBC Individual Tax Residency Self-Certification form.

Please note that you will receive more than one request for documentation if you have multiple relationships with different members of the HSBC Group. It is important that you respond to all requests, even if you believe that you have already supplied the requested information.

HSBC is unable to offer tax advice. For tax-related questions, please contact your professional tax advisor or refer to the relevant IRS or CRA website.

Why does the form ask for my country of tax residency?

The Individual Tax Residency Self-Certification Form is a combined form for both FATCA and the Common Reporting Standard (“the CRS”). This is in line with industry standards and CRA forms. The U.S. Person question relates to FATCA and the Tax Residency questions relate to the CRS.

Even if you have provided us with information related to CRS, you may still need to provide additional information for FATCA – FATCA is governed by different provisions of Canadian law.

What kind of documentation should a Trust complete?

Under FATCA, a Trust is considered an entity and must provide appropriate documentation to confirm its tax status to us for the purposes of FATCA.

The Declaration of Tax Residence for Entities Form is required to be used to document a formal Trust for FATCA purposes – the Trust will need to certify the following on the form (along with other basic information):

• Whether or not the Trust is a U.S. Person.
• The type of entity for FATCA purposes.

If the Trust certifies that it is a Passive NFFE (see glossary), then the Trust will also need to certify whether or not it has any U.S. Controlling Persons. If the Trust is a Passive NFFE and has U.S. Controlling Persons, then the Trust must also provide information regarding the identity of any U.S. Controlling Persons on the form.

HSBC cannot offer any tax advice relating to Trusts, and we recommend customers contact a professional tax advisor to discuss their personal tax situation if needed.

Will HSBC supply me with all the forms I need to complete?

Yes. If HSBC requires further information from you, we will either send you the relevant forms or direct you to a website where you can download them.

When do I have to provide the requested information and/or documentation for FATCA?

In general, customers should supply the requested documentation and information by the date indicated within the communication.

What will HSBC do if I do not provide the information required under FATCA?

HSBC is committed to be fully compliant with FATCA.

The HSBC Group may not open new accounts or offer additional products and services to customers who choose not to comply with HSBC's requests for documentation to determine a customer's status under FATCA. In addition, under Canadian legislation relating to FATCA, we will have to report your account(s) to the CRA.

Who can I escalate my FATCA concerns to in HSBC?

Please refer to our complaints handling brochure to find out more on how to escalate any concerns you have: www.hsbc.ca/complaints.